Many long distance companies charge a monthly fee in order for you to get a particular rate for long distance. Other long distance service providers, have monthly minimums you must meet or you are assessed an additional charge.

The key to getting a good deal on your long distance service is to know your usage. The key things to know, how many minutes do I use in a month, does it vary a lot from month to month, and are there particular states I place most of my calls to.

Armed with this information, you can take ?additional? charges you are likely to pay, divide it by your usage, and add that to rate per minute your long distance service provider is charging you. That will give you a true cost per minute which can be compared between providers.

Some examples will probably help. Lets help Mary, Joe, and Mike figure which of three plans to select. The plans are as follows:

Plan A

$.04/minute, plus monthly fee of $5.95

Plan B

$50.00 for 1200 minutes, plus $.07/minute over 1200 mins.

Plan C

$.10/minute, no other fees.

Each of them gets out their phone bills for last year, and checks their long distance usage.

Mary

Mary used 14,400 minutes of long distance service in last 12 months, an average of 1200 minutes each month. She would use 600 minutes one month, than 1800 minutes next, pattern repeating throughout year. For Mary costs of plans would be:

Plan A

600 min. months: ($.04 x 600) + $5.95 = $29.95

1,800 min. months: ($.04 x 1800) + $5.95 = $77.95

Her total bill for year: (6 x $29.95) + (6 x $77.95) = $647.40

Total cost per minute: $647.40 / 14,400 = $.045/minute

Plan B

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